Filed by Hewlett-Packard Company Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Compaq Computer Corporation
Commission File No.: 1-9026
This filing relates to a planned merger (the "Merger") between Hewlett-Packard
Company ("HP") and Compaq Computer Corporation ("Compaq") pursuant to the terms
of an Agreement and Plan of Reorganization, dated as of September 4, 2001 (the
"Merger Agreement"), by and among HP, Heloise Merger Corporation and Compaq. The
Merger Agreement is on file with the Securities and Exchange Commission as an
exhibit to the Current Report on Form 8-K, as amended, filed by Hewlett-Packard
Company on September 4, 2001, and is incorporated by reference into this filing.
Dear Walter:
We are disappointed with your recent public filing with the Securities and
Exchange Commission.
With respect to your financial advocacy, we refer to HP's filing with the
Securities and Exchange Commission on December 19, 2001 which contains a proper
description of the financial aspects of the merger and a summary of flaws in the
presentations prepared by you and your advisors in opposition to the merger.
We are particularly disturbed by your public presentation of your actions as a
director, and specifically note the following:
. We know you to be an independent thinker and an experienced board member
who knows very well what your fiduciary duties are - to vote as a director
in the best interests of HP shareowners. We all assumed that you were
upholding those duties when you willingly voted in favor of the merger as a
director. To suggest that you were pressured into approving the merger is
inaccurate and inappropriate.
. In addition, you were never advised that HP would be forced to pay a
higher price for Compaq if you voted against the merger. In fact, there was
no discussion regarding a non-unanimous board vote requiring the payment of
a higher price for Compaq. Moreover, as you know, at the time of the
alleged discussions regarding these matters, price, among other
significant issues, remained unresolved.
. We believe it is inappropriate that you neglected to disclose in your
recent filing that you failed to attend key meetings of the HP board of
directors at which financial and strategic aspects of the merger were
discussed in detail.
. Contrary to your public assertions otherwise, neither the board nor
management were informed how you would vote your shares until one-half hour
before your public announcement on November 6, 2001.
Walter, we understand that your investment and other motivations may be
different from those of other shareowners; this would account for you voting
differently as a director and as a shareowner, and, perhaps, for recently
published reports of the sale of HP shares by the foundation you chair.
As you are aware, the company and the board have spent considerable time
analyzing the strategic alternatives available to HP to preserve and create
shareowner value. Our board process was deliberate, thorough and complete, with
management and advisor input and debate among all of the directors. We
collectively concluded that the merger represented by far the single best
strategic alternative for the company. Quite frankly Walter, you have never
offered an alternative strategy that we all haven't debated and rejected.
Our strategy is compelling and we remain confident in management's ability to
execute on the plan that we all debated and endorsed.
Philip M. Condit, HP Director
Patricia C. Dunn, HP Director
Carleton S. Fiorina, HP Chairman of the Board and Chief Executive Officer
Sam Ginn, HP Director
Richard A. Hackborn, HP Director
George A. Keyworth II, HP Director
Robert E. Knowling Jr., HP Director
Robert P. Wayman, HP Director, Executive Vice President and Chief Financial
Officer
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
On November 15, 2001, HP filed a registration statement with the SEC containing
a preliminary joint proxy statement/prospectus regarding the Merger. Investors
and security holders of HP and Compaq are urged to read the preliminary joint
proxy statement/prospectus filed with the SEC on November 15, 2001 and the
definitive joint proxy statement/prospectus when it becomes available and any
other relevant materials filed by HP or Compaq with the SEC because they
contain, or will contain, important information about HP, Compaq and the Merger.
The definitive joint proxy statement/prospectus will be sent to the security
holders of HP and Compaq seeking their approval of the proposed transaction. The
preliminary joint proxy statement/prospectus filed with the SEC on November 15,
2001, the definitive joint proxy statement/prospectus and other relevant
materials (when they become available), and any other documents filed by HP or
Compaq with the SEC, may be obtained free of charge at the SEC's web site at
www.sec.gov. In addition, investors and security holders may obtain free copies
of the documents filed with the SEC by HP by contacting HP Investor Relations,
3000 Hanover Street, Palo Alto, California 94304, 650-857-1501. Investors and
security holders may obtain free copies of the documents filed with the SEC by
Compaq by contacting Compaq Investor Relations, P.O. Box 692000, Houston, Texas
77269-2000, 800-433-2391. Investors and security holders are urged to read the
definitive joint proxy statement/prospectus and the other relevant materials
when they become available before making any voting or investment decision with
respect to the Merger.
HP, Carleton S. Fiorina, HP's Chairman of the Board and Chief Executive Officer,
Robert P. Wayman, HP's Executive Vice President, Finance and Administration and
Chief Financial Officer, and certain of HP's other executive officers and
directors may be deemed to be participants in the solicitation of proxies from
the stockholders of HP and Compaq in favor of the Merger. The other executive
officers and directors of HP who may be participants in the solicitation of
proxies in connection with the Merger have not been determined as of the date of
this filing. A description of the interests of Ms. Fiorina, Mr. Wayman and HP's
other executive officers and directors in HP is set forth in the proxy statement
for HP's 2001 Annual Meeting of Stockholders, which was filed with the SEC on
January 25, 2001. Investors and security holders may obtain more detailed
information regarding the direct and indirect interests of Ms. Fiorina, Mr.
Wayman and HP's other executive officers and directors in the Merger by reading
the preliminary joint proxy statement/prospectus filed with the SEC on November
15, 2001 and the definitive joint proxy statement/prospectus when it becomes
available.
Pursuant to an engagement letter dated July 25, 2001, HP retained Goldman, Sachs
& Co. ("Goldman Sachs") to act as its financial advisor in connection with the
Merger. In connection with the engagement of Goldman Sachs as financial advisor,
HP anticipates that employees of Goldman Sachs may communicate in person, by
telephone or otherwise with certain institutions, brokers or other persons who
are stockholders for the purpose of assisting in the solicitation of proxies in
favor of the Merger. Although Goldman Sachs does not admit that it or any of its
directors, officers, employees or affiliates is a "participant," as defined in
Schedule 14A under the Securities and Exchange Act of 1934, as amended, or that
Schedule 14A requires the disclosure of certain information concerning them in
connection with the Merger, Gene Sykes (Managing Director), Matthew L'Heureux
(Managing Director), George Lee (Vice President) and Jean Manas (Vice
President), in each case of Goldman Sachs, may assist HP in the solicitation of
proxies in favor of the Merger.
Compaq and Michael D. Capellas, Compaq's Chairman and Chief Executive Officer,
and certain of Compaq's other executive officers and directors may be deemed to
be participants in the solicitation of proxies from the stockholders of Compaq
and HP in favor of the Merger. The other executive officers and directors of
Compaq who may be participants in the solicitation of proxies in connection with
the Merger have not been determined as of the date of this filing. A description
of the interests of Mr. Capellas and Compaq's other executive officers and
directors in Compaq is set forth in the proxy statement for Compaq's 2001 Annual
Meeting of Stockholders, which was filed with the SEC on March 12, 2001.
Investors and security holders may obtain more detailed information regarding
the direct and indirect interests of Mr. Capellas and Compaq's other executive
officers and directors in the Merger by reading the preliminary joint proxy
statement/prospectus filed with the SEC on November 15, 2001 and the definitive
joint proxy statement/prospectus when it becomes available.
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